QC Holdings, Inc. Reports First Quarter Results OVERLAND

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News Desk 2018

May 25, 2016 at 7:15 AM

QC Holdings, Inc. Reports First Quarter Results

OVERLAND PARK, Kan., May 25, 2016 (GLOBE NEWSWIRE) -- QC Holdings, Inc. (OTC PINK:QCCO) reported income from continuing operations of $1.2 million and revenues of $31.7 million for the three months ended March 31, 2016. For the three months ended March 31, 2015, income from continuing operations totaled $1.1 million and revenues were $34.5 million.

The revenue decline in first quarter 2016 compared to 2015 reflects lower interest and fees from the company’s consumer loan products, indicative of competitive pressures as customers explore alternative loan products and distribution channels. Loan loss rates were slightly lower in first quarter 2016 versus first quarter 2015, indicative of improvements in installment loan performance. The reduction in revenues exceeded the improved losses, resulting in a gross profit decline of $1.2 million quarter-to-quarter.

During 2016, QC will continue its efforts to introduce competitive products and services across its network, as well as to develop a dynamic online capability that will provide customers greater flexibility in interacting with the company.

About QC Holdings, Inc. Headquartered in Overland Park, Kansas, QC Holdings, Inc. is a leading provider of consumer loans in the United States and Canada. In the United States, QC offers various products, including single-pay, installment and title loans, check cashing, debit cards and money transfer services, through 389 branches in 22 states at March 31, 2016. In Canada, the company, through its subsidiary Direct Credit Holdings Inc., is engaged in short-term, consumer Internet lending in various provinces.

Forward Looking Statement Disclaimer: This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements are based on the company’s current expectations and are subject to a number of risks and uncertainties, which could cause actual results to differ materially from those forward-looking statements. These risks include (1) changes in laws or regulations or governmental interpretations of existing laws and regulations governing consumer protection or short-term lending practices, (2) uncertainties relating to the interpretation, application and promulgation of regulations under the Dodd-Frank Wall Street Reform and Consumer Protection Act, including the impact of proposed rulemaking by the Consumer Financial Protection Bureau (CFPB), (3) ballot referendum initiatives by industry opponents to cap the rates and fees that can be charged to customers, (4) uncertainties related to the examination process by the CFPB and indirect rulemaking through the examination process, (5) litigation or regulatory action directed towards us or the short-term consumer loan industry, (6) volatility in our earnings, primarily as a result of fluctuations in loan loss experience and closures of branches, (7) risks associated with our dependence on cash management banking services and the Automated Clearing House for loan collections, (8) negative media reports and public perception of the short-term consumer loan industry and the impact on federal and state legislatures and federal and state regulators, (9) changes in our key management personnel, (10) risks associated with owning and managing non-U.S. businesses, and (11) other various risks. QC will not update any forward-looking statements made in this press release to reflect future events or developments.

(Financial and Statistical Information Follows)

QC Holdings, Inc. Consolidated Condensed Statements of Income *(in thousands, except per share amounts)* (Unaudited)

	Quarter Ended March 31,
		2015		2016
Revenues
Consumer loan interest and fees	$	32,078	$	29,209
Other		2,437		2,464
Total revenues		34,515		31,673
Provision for losses		8,062		7,242
Operating expenses		16,615		15,873
Gross profit		9,838		8,558
Corporate and Regional expenses		7,119		6,530
Other expense, net		956		113
Income from continuing operations before income taxes		1,763		1,915
Provision for income taxes		676		693
Net income	$	1,087	$	1,222

Earnings per share:
Basic
Net income	$	0.06	$	0.07
Diluted
Net income	$	0.06	$	0.07

Weighted average number of common shares outstanding:
Basic		17,363		17,333
Diluted		17,363		17,333

QC Holdings, Inc. Consolidated Condensed Balance Sheets *(in thousands)*

	December 31, 2015		March 31, 2016
ASSETS			*(Unaudited)*
Current assets
Cash and cash equivalents	$	16,115	$	16,678
Restricted cash		950		950
Loans receivable, less allowance for losses of $6,395 at December 31, 2015 and $5,496 at March 31, 2016		50,555		42,751
Other current assets		6,286		5,639
Total current assets		73,906		66,018
Non-current loans receivable, less allowance for losses of $1,556 at December 31, 2015 and $1,053 at March 31, 2016		3,802		3,337
Property and equipment, net		4,797		4,727
Other assets, net		11,486		10,785
Total assets	$	93,991	$	84,867

LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities
Accounts payable and other current liabilities	$	11,407	$	9,914
Revolving credit facility		6,250
Subordinated debt		3,553		3,589
Total current liabilities		21,210		13,503

Non-current liabilities		4,967		3,545
Subordinated debt
Total liabilities		26,177		17,048

Stockholders’ equity		67,814		67,819
Total liabilities and stockholders’ equity	$	93,991	$	84,867

QC Holdings, Inc. Consolidated Condensed Statements of Cash Flows *(in thousands)* (Unaudited)

	March 31, 2015			March 31, 2016
Operating activities:
Net income	$	1,087		$	1,222
Adjustments to reconcile net income to net cash		9,791			9,514
Changes in assets and liabilities		2,772			(3,695	)
Net operating		13,650			7,041

Investing activities:
Capital expenditures		(121	)		(466	)
Other		1,183			30
Net investing		1,062			(436	)

Financing activities:
Net repayment of borrowings		(12,000	)		(6,250	)
Other		(73	)
Net financing		(12,073	)		(6,250	)

Effect of exchange rate changes on cash and cash equivalents		(186	)		208

Net increase in cash and cash equivalents		2,453			563
Cash and cash equivalents at beginning of year		14,220			16,115
Cash and cash equivalents at end of period	$	16,673		$	16,678

Contact: Douglas E. Nickerson (913-234-5154) Chief Financial Officer

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